Denarius Silver Corp. Signs New Letter of Intent for Acquisition of the Lomero Project, Spain

VANCOUVER, Feb. 25, 2021 - Denarius Silver Corp. ("Denarius Silver" or the "Company") (TSXV: DSLV.H), is pleased to announce that it has entered into a binding letter agreement dated effective February 22, 2021 (the "Letter Agreement"), with Qvartz Capital Partners Inc. ("Qvartz") as assignor and the shareholders of Transcontinental Gold Mines Pty Ltd., a company organized under the laws of Australia ("TGM" and such shareholders, collectively, the "Vendors") for the purchase of 100% of the issued and outstanding shares of TGM (the "Transaction"), which in turn owns 100% of the issued and outstanding shares of Alto Minerals S.L.U., a company organized and existing under the laws of the Kingdom of Spain ("Alto"), in order to acquire, subject to the terms and conditions of the Letter Agreement, a 100% interest in the Investigation Permit Nº 14,977 also identified as Rubia (the "Permit") covering the areas occupied by the former Lomero-Poyatos Concessions and the mine within them in southern Spain ("the "Lomero Project").


Lomero Project

Investigation Permit 14,977 comprises 15 graticular blocks totalling approximately 454 hectares within the adjoining Municipalities of El Cerro del Andevalo and Cortegana within the Huelva Province of the Autonomous Community of Andalucía in southern Spain. The area covered by the Permit is located approximately 85 km north-west of Seville and 60 km north-east of the port of Huelva and includes the area previously occupied by 13 mining concessions including the former Lomero-Poyatos Mine.

The Rubia Permit is an Investigative Mining Permit of approximately 454 hectares covering the Lomero-Poyatos Project which is a polymetallic deposit located in the Huelva Province in Southern Spain, within the Iberian Pyrite Belt which is one of the largest districts of pyrite-rich massive sulphide deposits in the world. The project deposit site is well serviced by water, power, paved highways, port access and is also positioned in close proximity to the Matsa JV project which has processing facilities with the capacity to process 4.4M tons of copper and polymetallic ore annually. Exploration conducted by prior ownership indicates a historical inferred resource of 22.17 Mt of 3.08 g/t gold, 62.38 g/t silver, 0.90% copper, 0.85% lead and 3.05% zinc. The mineral resource is reported within a >25% S mineral envelope at a cut-off grade of 1.0 g/t Au for an underground mining scenario. The mineral resource estimate was reported in a NI 43-101 technical report by Behre Dolbear with effective date of 2011. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, and the Company is not treating the historical estimate as current mineral resources or mineral reserves. The Lomero-Poyatos (Rubia Permit) deposit remains open at depth and along strike and SRK has been contracted to design an exploration program to confirm the inferred resource base and further explore the potential at Lomero-Poyatos (Rubia Permit).


Terms of the Transaction

Under the terms of the Transaction, the Company will acquire 100% of the issued and outstanding shares of TGM (the "TGM Shares"), which in turn owns of 100% of the issued and outstanding shares of Alto, which currently holds the Permit.

In exchange for the TGM Shares, the Company will pay the following consideration to the Vendors: (i) 6.5 million Euros over a 1 year term; (ii) reimburse the Vendors' transaction costs and related expenses up to Euro 1.85 million, (iii) issue 5,600,000 common shares of the Company and (iv) grant a 0.5% net smelter returns royalty. In addition, in consideration of the assignment of the rights of Qvartz to purchase the interest in the Permit (i) the Company will issue at the direction of Qvartz 29,400,000 common shares of the Company and (ii) grant a 1.5% net smelter returns royalty. The Company will also issue to Fiore Management & Advisory Corp. 700,000 common shares as an administration success fee.


Concurrent Financing

As a condition to completing the Transaction, the Company intends to complete a non-brokered private placement financing (the "Concurrent Financing") to raise up to $33.75 million through the issuance of up to 75,000,000 subscription receipts of the Company at a price of $0.45 per subscription receipt.

The proceeds of the Concurrent Financing will be held in escrow, pending the Company receiving all applicable regulatory approvals and completing the Transaction. Upon satisfaction of the escrow conditions, immediately prior to completion of the Transaction, each subscription receipt will automatically convert into one unit (each a "Unit") of the Company for no additional consideration and will be exchanged for a Unit of the Company on a one-for-one basis. Each Unit shall be comprised of one common share (each a "Share") and one Share purchase warrant (each a "Warrant"). Each Warrant shall be exercisable into one Share at a price of $0.80 per Share for a period of five (5) years from the closing date of the Concurrent Financing. The Shares and Warrants shall be subject to a hold period of four (4) months plus one day from the date of closing of the Concurrent Financing. If the Transaction is not completed on or before April 30, 2021, the proceeds of the Concurrent Financing will be returned to the subscribers. The Company expects to pay finder's fees of 6% to arm's length parties who introduce subscribers to the Concurrent Financing, in accordance with the policies of the Exchange. It is anticipated that the proceeds from the Concurrent Financing will be utilized to make the Transaction payments, undertake an exploration and development program on the Lomero Project and for the general and administrative expenses of the Company.

Gran Colombia Gold Corp. has committed to participating for $10 million of the Concurrent Financing and a multi-billion investment manager has committed to $15 million of the Concurrent Financing.

No new Control Person will be created as a result of the Transaction or the Concurrent Financing.

Following the closing of the Transaction and the Concurrent Financing, the Company expects to have approximately 203,817,915 common shares issued and outstanding.


Qualified Persons Review

The technical information in this news release has been reviewed and approved by Stewart Redwood, BSc (Hons), PhD, FIMMM, FGS, a "Qualified Person" as defined under National Instrument 43-101.


Further Information

Closing of the Transaction is subject to a number of conditions including the accuracy of each parties' representations and warranties, absence of material adverse changes with respect to TGM and Alto, receipt of TGM shareholder approval, receipt of disinterested shareholder approval, receipt of all required regulatory and third-party consents, including approval of the TSX Venture Exchange (the "Exchange"), and satisfaction of other customary closing conditions. The Transaction cannot close until the aforementioned conditions are satisfied and required approvals are obtained. There can be no assurance that the Transaction will be completed as proposed, or at all.


On Behalf of the Board of Directors,

Denarius Silver Corp.



The TSX Venture Exchange has in no way passed upon the merits of the proposed Transaction and has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Completion of the Transaction is subject to a number of conditions, including but not limited to completion of satisfaction due diligence, Exchange acceptance and shareholder approval, if applicable. The Transaction cannot be completed until such conditions are satisfied and approvals are obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, "forward?looking statements". Forward?looking statements may be identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. The Company cautions readers that forward?looking statements, including without limitation those relating to the Company's future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward?looking statements. The Company is not treating the historical estimate of inferred resources mentioned in this press release as current mineral resources or mineral reserves. Inferred resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. Estimates of inferred resources may not form the basis of feasibility or other economic studies.

SOURCE Denarius Silver Corp.



Contact

Frederic Leigh, Chief Executive Officer
Phone: 604.609.6110
Email: investors@denariussilver.com
Website: www.denariussilver.com